...Airbus vs Boeing !1 Jon Martin-Vegue Professor: Capt J. Green AVSC 2150 January 16, 2016 Airbus vs Boeing Good economic times is accompanied by an excess of wealth. This excess wealth will be used in a variety of ways for enjoyment that will allow people to travel places they would not normally go. Excess wealth is exactly what the airline industry profits from. Airbus’s new A380 aircraft will thrive in this environment because of how large the aircraft capacity is. It will provide the additional capacity needed to increase airline revenues during good economic times. The 550 seat capacity will allow for lower ticket prices giving more passengers the opportunity to visit places all around the globe. While airlines will be paying quite a steep price for the A380, for as long as the good economic times continue there should be no problem being able to fill the seats which in turn will fill the pockets for the airline. During poor economic times people are less likely to spend money and tend to save as much as possible. Job security is always a fear that is holding people back form excess spending. During these hard times the airlines are hit hard because of the lower amount of travelers. Airlines that own aircraft such as the A380 will have trouble filling all 550 seats due to the high prices. These “high prices” are mostly due to the drastic amount of fuel that this aircraft uses to fly form hub to hub (www.planes.axlegeeks.com). Airlines will be turning...
Words: 492 - Pages: 2
...Executive Summary Activities in the commercial aeroplane manufacturing industry have been outshined by the competition involving the European owned Airbus and the USA owned Boeing. These two companies exist as a duopoly at the top end of the commercial aeroplane manufacturing industry that covers the development of airplanes with a capability of more than 200 persons. Other aeroplane manufacturers also exist but at the lower end of the industry, these smaller firms mainly develop low capacity airplanes that basically convey less than 150 persons. Boeing is a United States of America based company which was founded by William Edward in 1916, the firm has been dominating the industry since its inception while on the other hand Airbus was founded in 1970 by the European Aeronautic and Space Co. (EADS) with its headquarters in Toulouse, France in other to challenge the monopoly thus far enjoyed by Boeing. The trade disputes or disagreements involving the European Union (EU) as well as the United States (US) take precedence in the rivalry or fight between this two firms. Whilst Airbus receives subsidies in the form of launch aid from the European Union while at the same time Boeing is granted right to use the United States military’s Research and development technology. Owing to the soaring operating fund as well as long product break even time associated in the airplane manufacturing industry, it can be reasonably debated or argued that it will be somehow difficult for each of...
Words: 7131 - Pages: 29
...Airbus Vs Boeing Nov 2014 1 I. Airbus Airbus has been created because the French, German and British governments wanted to launch a European aeronautics program to compete with American companies such as Boeing, McDonnell Douglas or Lockheed. In 1970, l’Aérospatiale and Deutsche Airbus make a consortium. In 1971, the Spanish C.A.S.A join them, followed in 1979 by British Aerospace. At that moment, the German and the French used to get 38% of the total benefice, 20% was for the British and 4% for the Spansih The first flight of an Airbus plane was on May 12th.1979 with Air France. The plane made a return trip Toulouse-Paris. The most famous plane was A320. There were 10,994 orders for this plane and only 6,285 of them are delivered for the moment. The last plane Airbus launched is the A350 XWB. There are already 750 orders from 39 customers worldwide Airbus usually sales its planes to normal flight companies like Air Austral, Air France, Amedeo, Asiana, Emirates; but also Jetliners and private owner (Arabic prince …) and the industry. II. Boeing The first plane of Boeing was a Seaplane, the Boeing Model I, on June 15th, 1916. The New-Zeland Flying School was the first company to pilot the plane with two crews at a maximum speed of 121 km/h. 2 The most famous plane of Boeing is the B-737. The first flight was in 1968 with Lufthansa Company. Nowadays, 8237 plane were sell and this plane is used by Southwest Airlines, Ryanair...
Words: 888 - Pages: 4
...Boeing V. Airbus Mark Kenley Utah Valley University Airbus and Boeing are two of main aircraft manufacturers in the world. They are also each other’s competition. Good economies have an impact on the aviation world, as well as when the economy is poor. The function and constructions of the aircraft have a big impact on whether they succeed or do not. It also is a deciding factor on whether or not the aircraft will succeed in the future. If you are a part of the aviation world, you should be somewhat familiar with Boeing and Airbus, or at least recognize the name. Some of us, like myself, aspire to be left seat in either one of them someday. Although they are similar aircrafts and forms of transportation, they still are different in many ways. They are also each other’s main competition. The economy, whether it is bad or good, obviously has an effect on both The Boeing and The Airbus. But, when it comes to determining which will be more likely to succeed in the future, it is best to start doing some research. Boeing is the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems. Boeing is also a major exporter and supplies customers and governments in over 150 countries. Although the aviation world immediately thinks of aircrafts only when they hear the word “Boeing,” they also have products manufactured like satellites, weapons, and even launch systems. Boeing was also founded nearly 100 years ago. July...
Words: 710 - Pages: 3
...Harvard Business School Strategy Working Paper Series Working Paper Number: 02-061 Working Paper Date: February 2002 “Airbus vs. Boeing in Super Jumbos: A Case of Failed Preemption” Benjamin Esty (Harvard Business School) Pankaj Ghemawat (Harvard Business School This paper can be downloaded without charge from the Social Science Research Network electronic library at: http://ssrn.com/abstract_id=302452 Airbus vs. Boeing in Superjumbos: A Case of Failed Preemption* August 3, 2001 Rev. February 14, 2002 Benjamin C. Esty Morgan 381 Harvard Business School Boston, MA 02163 Tel: (617) 495-6159 e-mail: besty@hbs.edu Pankaj Ghemawat Morgan 227 Harvard Business School Boston, MA 02163 Tel: (617) 495-6270 e-mail: pghemawat@hbs.edu *Acknowledgements: Ramon Casadessus-Masanell, Bruno Cassiman, Richard Caves, Ken Corts, Tarun Khanna, Julio Rotemberg, Vicente Salas Fumas, Xavier Vives and seminar/workshop participants at Boston University, Copenhagen Business School, Harvard Business School, INSEAD, New York University and Universitat Autonoma de Barcelona provided helpful comments. So did senior executives at both Airbus (Adam Brown, John Leahy) and Boeing (Tim Meskill, Randy Baseler, and Jim Jessup), although their comments do not constitute an endorsement of the material in either the teaching case or this paper. We also gratefully acknowledge help from Ed Greenslet, Don Schenk, and The Airline Monitor in obtaining data and insights about the commercial jet aircraft industry...
Words: 21672 - Pages: 87
...Topic Paper – Week 3 Boeing Commercial Air versus Airbus Group Submitted by Cita Renee’ Reid Prepared for Professor Greg Gotches BUSN 6120, Managerial Economics Spring 1, 2015 Section OE Webster University 24 January 2015 CERTIFICATE OF AUTHORSHIP: I certify that I am the author. I have cited all sources from which I used data, ideas, or words, either quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course. Cita Renee Reid________________________24 January 2015 Signature Date Introduction For nearly four decades, Boeing Corporation and Airbus Group have battled for supreme dominancy of the large civil aircraft (LCA) market. In years past, U.S. held Boeing had dominated the commercial aircraft industry; however, between YY and 2013, European-owned Airbus, had slightly edged Boeing out as the top supplier. In 2014, the precarious balance was tipped once again, as Boeing delivered more aircraft to its customers; thereby, reestablishing itself as the number one manufacturer. This paper will explore the history of the companies, how they are alike and different (particularly their production process), how they approach the aircraft marketplace, where their rivalry will likely head and the most probable outcome of their ongoing competition. It will also give a brief history and overview of the World Trade Organization (WTO) 2012 ruling over the receipt of governmental subsidies...
Words: 3041 - Pages: 13
...Review of the Boeing VS Airbus Case Study Introduction In the market for large aircraft demand the emerging niche for very large aircraft (VLCT aircraft seating more than 400 passengers) saw only two competitors: Boeing and Airbus. Even though both competitors’ moves were clearly marked by technology enhancements, and different target markets but both exhibited strategic interdependence. Option with Boeing: Boeing being the market leader for almost a decade as a manufacturer of large commercial aircraft and had also reached economies of scale, the need to sustain its market share it presumed that “customers might demand for new”. Any potential growth was only through taking super leap and making VLCT jumbo aircraft which needed huge investment beyond Boeing’s financial reach (that too for an uncertain future market) Boeing had the technology advantage over airbus because Boeing had already tested and launched Boeing 747 (a large passenger carrier). Only stretch of design was needed to build up “jumbo dream line VLCT aircraft”. But being a private firm and not state run the kind of investment required to develop new carrier and also the uncertainty of the future market were problems. It had the option to continue to manufacture famous “Boeing 747” and not go for VLCT Jumbo. But the VLCT superjumbo was a strategic commitment of more than average interest because of its sheer size, irreversibility and potential impact on industry structure if nothing goes bad. VLCT...
Words: 1399 - Pages: 6
...Caso: Boeing versus Airbus: Dos décadas de disputas comerciales. 1. No creo que fuera una subsidiaria competitiva ya no iba a tener el mismo poder que tiene al recibir subsidios de cuatro países importantes estos son: Gran Bretaña, Francia, Alemania y España. Al recibir subsidios se fortalece por que recibe ayuda extras que por lo general una empresa no recibe si opera sola. Con esto tiene la ventaja de reducir sus gastos y aumentar sus ganancias. Si no recibiera 13.5 millones de subsidios en préstamos por debajo de las tasas del mercado, no tuvieran la ventaja de poder financiar a sus clientes el 80% del costo en un término de 8 a 10 años a una tasa de interés anual de 7%.Con esta ventaja son superiores a Boeing por consiguiente sin las ayudas de estos a países no pudiera ofrecer una mejor oferta que Boeing. 2. Los cuatro gobiernos Europeos le dan subsidios a Airbus porque esto le daría una mayor ventaja competitiva en el mercado enfrentándose a su enemigo mayor Estados Unidos. Otro factor darle a Airbus el poder adquisitivo para enfrentar los atractivos ofrecidos a los clientes de su competidor. Querer que la nación Europea fuera el líder en el área de industria de aviones frente a la nación Estadounidense. 3. No la considero razonable eso siempre va a ser así las empresas multinacionales buscan siempre maximizar su ganancias a costa de lo que sea. No importando la política economía que tengan siempre las empresas van a querer obtener su beneficio del gobierno...
Words: 1091 - Pages: 5
...Page |1 INTERIM REPORT ON COMMERCIAL AIRCRAFT MANUFACTURING INDUSTRY The world aircraft industry can be divided into 2 major segments: 1. Military and space aero-structure 2. Commercial Aircraft 1. Passenger aircraft – a. LCA (Large Civil Aircraft) and b. Small & medium sized aircraft 2. Cargo aircraft COMMERCIAL AIRCRAFT INDUSTRY Commercial aircraft manufacturing industry consists of very few players dominated by two big players namely Boeing and Airbus, yet it is very complex because of a number of suppliers at various levels (Tiers) creating the differences in the supply chain management of different players. The industry has undergone a steady growth and it is set to increase in the coming future due to strong demand forecast especially from emerging economies and huge backlog of orders from the major Airlines. Hence the industry continues to be profitable. But at the same time, being a capital and technology intensive industry, it poses severe challenges in front of potential players. INDUSTRY ANALYSIS- (PORTER’S FIVE FORCES) Threat of New Entrants-Low There are high entry barriers due to high R&D investment, sophisticated technology and difficulty in financing because of very high capital intensiveness. But positive economic growth and long range forecast in emerging economies are attracting new players to enter despite huge entry barriers. Cost efficient carriers from China and other economies like Mexico and Russia are trying to sabotage the duopoly. Threat of Substitutes-Low...
Words: 1163 - Pages: 5
...How might the repayable launch aid for Airbus change its decision making on launching a new aircraft? What are the potential consequences for (a) Boeing, (b) airlines, and (c) the profitability of both Boeing and Airbus? Boeing: • Launch aid • Government agencies Airlines: • Price per aircraft • Accommodating runways • Increase in costs The probability of both Boeing and Airbus is: Pull fundin When Airbus originally received government aid in the 1960’s, it was a new enterprise. Today it is the global market share leader in the commercial aerospace business. How do gains in market share affect the legitimacy of claims for subsidies? Over the life of Airbus, it has grown into the global market share leader in the commercial aircraft industry. Gains in market share affect the legitimacy of claims for subsidies and in Airbus’s case as they have gained a larger market share their subsidies have gone down. Eventually these subsidies will almost become nothing as is continues to grow. The government organization do benefit from these subsidies they lend. The space subsidies are repayable with interest so the subsidies are legitimate. Suppose the effect of the legitimacy of the claim for subsidies is going down when the company became stronger. The subsidies have to oppose as the company’s power because of the company become stronger, they do not need to get subsidies. Otherwise, if the company market share loses, subsidies must be increase. The company is a global...
Words: 2434 - Pages: 10
...Case Study 39 Airbus vs. Boeing Prepared by Lisa Neumann Matthias Pernkopf Viktoria Scheidl Case study 39 Airbus vs. Boeing Contents: • • • • • History of Airbus History of Boeing Question 1 Question 2 Question 3 History of Airbus •1970: Airbus was formed as European consortium of French and German companies •Spain companies joined the consortium •1979: British Aerospace joined Airbus Industrie. •Each of the four partners operated as national companies •Airbus developed a deserved reputation •2001: Airbus became a single fully integrated company •2004: company had overtaken its main rival •In January 2005 the world’s largest and most advanced passenger aircraft appeared, the A380 •Airbus is one of the world’s leading aircraft manufacturers History of Boeing • was established by William Boeing • the most successful company of U.S. •1916: built their first plane •1917: the Boeing Airplane Company arose. •During World War I, the Navy needed training airplanes. • Boeing leading designer of military aircraft. •1927: Boeing created an airline, named Boeing Air Transport (BAT) •1958:The US became a leader in commercial jet manufacture. •2001: Boeing is focused on 787 Dreamliner •Boeing lost ground to Europe’s Airbus and lost its position as market leader in 2003. • 2006 sets another new Boeing record for total commercial orders in a single year. Question 1 Why is the aircraft manufacturing industry dominated by only two companies?Discuss the barriers...
Words: 779 - Pages: 4
...Term Paper on Airbus INTRODUCTION In December 2000, Airbus formally committed to develop and launch a super jumbo plane known as the A380 at a launch cost of $13 billion. Prior to and after Airbus’ commitment, Boeing started and canceled several initiatives aimed at developing a “stretch jumbo” with capacity in between its existing jumbo (the 747) and Airbus’ planned super jumbo. In addition to making the super jumbo one of the largest product launch decisions in corporate history, this figure represented 26% of total industry revenues in 2000 ($45.6 billion) and more than 70% of Airbus’ total revenues in 2000. The inherent risk associated with this major strategic commitment is magnified by the fact that Airbus must spend the entire amount before it delivers the first plane. History has shown that many firms including General Dynamics, and, more recently, Lockheed, have failed as a result of attempting such bet-the-company product development efforts. If, however, the launch effort does succeed, Airbus is expected to dislodge Boeing as the market leader in commercial aircraft after more than 50 years of market dominance by the latter. We can write a custom term paper on Airbus for you! This term paper presents an analysis of this new product commitment and, more generally, of competition in very large aircraft (VLA is defined as planes capable of seating more than 400 passengers). CASE BACKGROUND In the early 1990s, Airbus and Boeing independently began to study...
Words: 3680 - Pages: 15
...------------------------------------------------- vs. ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- ------------------------------------------------- Oleh: Arif Prananda – 041143069 Udin Setyawan – 0411430__ Marsutiyawan Aji – 0411430__ Wahyu – 0411430__ MAGISTER MANAJEMEN ANGKATAN 38 AKHIR PEKAN UNIVERSITAS AIRLANGGA SURABAYA 2013 AIRBUS vs. BOEING (A) Sejarah Airbus dan Boeing A. Sejarah Airbus Airbus S.A.S. adalah produsen pesawat komersial yang berbasis di Toulouse, Perancis. Perusahaan ini didirikan tahun 2001 di bawah hukum Perancis sebagai perusahaan join stok yang dipermudah or "S.A.S." (Société par Actions Simplifiée). Airbus dipegang oleh EADS (80%) dan BAE SYSTEMS (20%), dua penyedia dan pemroduksi militer terbesar. Juga dikenal nama dahulu Airbus Industrie, atau Airbus. Airbus mempekerjakan sekitar 40.000 karyawan di beberapa negara Eropa. Perakitan final dilaksanakan di Toulouse, Perancis dan Hamburg, Jerman, meskipun konstruksi dilakukan di beberapa pabrik di Eropa. Airbus Industrie mulai sebagai konsorsium perusahaaan penerbangan Eropa untuk menandingi perusahaan Amerika seperti Boeing dan McDonnell Douglas. Dibentuk pada tahun 1970 setelah adanya persetujuan antara Aerospatiale (Perancis) dan Deutsche Aerospace (Jerman) (disusul oleh CASA (Spanyol) pada tahun 1971) untuk mengembangkan Airbus A300, yang terbang...
Words: 1354 - Pages: 6
...Competitors Analysis Airbus and Boeing are considered duopoly in a large jet airliner industry. Together, they hold over 60% of the market share with Airbus having 33% and Boeing having 30% of the market. Fig. 1 Airline Industry Market Share Both companies compete largely on the basis on technology, size, and weight of the aircrafts. Airbus A380 is an example of how Airbus competes in terms of size. A380 competes directly with Boeing 747, which is the largest aircraft of Boeing. In terms of the floor space, A380 has 49% more space than the 747, but 747 is 10% lighter; therefore, it reduces trip-cost by 21%. In these ways, Airbus and Boeing constantly compete to create better, bigger, and cost efficient aircraft. Fig. 2 Size comparison A380 vs. 747 In the last decade, Airbus received 8,933 orders and delivered 4,824, while Boeing received 8,428 and delivered 4,458 orders. The comparison suggests that Airbus has a slight edge over the airline industry in terms of orders received and delivered. Airbus A380 has given the biggest competition to Boeing as more airlines are looking for bigger aircrafts to carry more passengers and cargo at once to reduce cost. Boeing is taking a technological route to compete with Airbus by introducing the new Dreamliner with advance technology and eco-friendly engine that significantly reduces cost. Airbus has weaknesses that give Boeing an advantage in the industry. One of the major weakness is that Airbus doesn’t have a defense segment...
Words: 439 - Pages: 2
...The Battle between Airbus and Boeing At the commercial aircraft industry, there are three main segments: large commercial airplanes (LCA); regional jets; Private jets. At this moment only Boeing and Airbus belong to segment of large commercial airplanes (LCA), with firms such as Embraer of Brazil and Bombardier of Canada taking up positions within the segment of regional jets in North America, firms such as Gulfstream and LearJet round out the market of private jets (Heppenheimer 2001:135). There are striking differences between the LCA and regional jet segments. The LCA market is truly global, which will be discussed later, while the regional jet market remains localized generally to one hemisphere – Bombardier and Embraer typically do not sell aircraft in Europe or Asia for example; those markets are generally served by different firms within those regions.15 The Boeing and Airbus are only two firms that share almost 100% of the market of LCA. While there are still older planes produced by defunct Soviet firms as well as some European manufactures such as British Aerospace or France’s Aerospatiale that remain in limited commercial service, it is safe to say that nearly all LCA were produced by either Boeing or Airbus. Therefore the market is highly concentrated and qualifies as a classic duopoly. Firms Structure Boeing. The Boeing Company is a publicly‐traded firm registered with Securities...
Words: 4054 - Pages: 17
